Money Management Strategy
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Thread: Money Management Strategy

  1. #1
    I'm new to the Forex market and new to this programming language so I am searching for advice in both fronts

    I devised this pseudo code for what I want to code since a Money Management egy that is easy and effective (I hope)... I want to ensure there are no loopholes and any advice about the best way to set this up logically within the EA....

    PercentageToTrade = the amount of risk you want to set
    Line 1 reduction = Max reduction is 700 pips in the line 1 buy price
    Line Two MaxLoss = 700 -- (distance between line 1 and line 2)... checks this in a line Two level open
    Line 3 Max reduction = 700 -- (distance between line 1 and line 3)...checks this in a line 3 degree open
    Line 4 Max reduction = 700 -- (distance between line 1 plus line 4)...checks this in a line 4 degree open

    MoneyToTrade = (Account Equity or AccountBalance, whichever is lower) *(PercentageToTrade/100) minus OpenedTradesPotentialLosss
    PotentialLossOfOpeningThisTrade(using base lot size and max pip reduction)
    MoneyToTrade=MoneyToTrade -- PotentialLossOfOpeningThisTrade

    Should MoneyToTrade gt; 0, Open Trade
    Else
    Print(”Do not have the capital to start this trade”)

  2. #2
    Using a 700 pip max loss on a transaction, you have a really major account or a account you are ok with losing a huge percentage of which is not a good idea.

    What your formulation doesn't take into account is how much is actually going to be lost if a transaction is taken out by the end. I don't care how much of my account I'm using to purchase a trade, I'm concerned with how much I'm risking if the trade fails. 1 standard lot using a 700 pip stop will fall an account by 7,000 (approximately). With 100:1 leverage that lot only cost me around 1500 or so to purchase.

  3. #3
    #1... 700 isn't the real discontinue loss.... The real stop loss is set by a line so it's variable.... I was attempting to use a number that could be conservative.... What would you take as a number?

    I will trade up to 1.2 micro lots in beginning

  4. #4
    Figure out the amount of lots needed to reach your maximum risk per trade. MT4 has alot of functions built in to assist with this and they are listed under the MarketInfo function. You can find how much each pip is worth for a normal lot and reduce down to a lot size. For instance:

    10,000 account.
    1.0% risk per trade
    100 to risk

    when I understand my stop will be 100 pips then I could easily figure out the number of lots I want. Request the pip value from marketinfo, lets say it yields 10 for EU.

    100 dollars to risk / (10 dollars per pip * 100 pips) =0.1 normal lots or 1 mini lot.

    Make sense??

  5. #5
    I Believe I'm confused... I am Certain you are trying to show me the logic of how that will fit into this Scenario:

    I've a micro lot account

    I could Possibly have a number of trades Available from multiple EAs and a number of currencies

    what I do Not want to Occur is a margin call even when all trades stop out

    I have a demo account that I started at 10k... That I will probably start with 5k when I go live

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